Putin orders cut in Ukraine supply

Vladimir Putin, Russia’s prime minister, yesterday ordered Gazprom, the Russian energy giant, to reduce gas supplies to Ukraine bound for Europe in a move that escalates the dispute between the two countries, writes Isabel Gorst in Moscow .

Gazprom claims Kiev has been stealing gas from transit pipelines since it cut off supplies to Ukraine on January 1 after talks about a new gas deal collapsed.

Mr Putin ordered Alexei Miller, chief executive of Gazprom, to cut supplies to the Ukrainian transit system by the same volume as Ukraine had taken.

Naftogaz, Ukraine’s state gas company, said it had been notified by Gazprom that it would cut transit supplies to Europe by 65.3m cubic metres a day to 221.8m cubic metres per day. “Gazprom has in fact cut volumes of transit gas to European customers,” Naftogaz said.Analysts were puzzled by the move, questioning why Mr Putin would order Gazprom to break its transit contract with Ukraine.

Bloomberg news agency reported that Russia and Ukraine had last night agreed to restart talks on their dispute.

Mr Putin met Mr Miller hours after Ukraine moved to annul the transit contract and warned it could increase transit fees 10-fold unless Gazprom accepted a fair price for gas.